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What Can You Do to Combat Rising Interest Rates?

What Can You Do to Combat Rising Interest Rates?

Have you been wanting to purchase a home, or trying to refinance your current home, but don’t think you can qualify with the new rates?  Inflation has increased dramatically, making it seem impossible for Canadians to do so. Going to your local bank for help is fine, but isn’t it better to get advice from a home financing expert?  A Mortgage Broker can improve your opportunities and guide you through this challenging period.

Our objective is to help you achieve your home financing goals, so here are some tips that can potentially help make the difference on your mortgage application.

Get A Co-signor

There are pros and cons to having a co-signor on your mortgage. With the rising rates, having a co-signor with better credit than yourself can potentially help you get approved for a bigger mortgage, and possibly at a lower interest rate. A lender will view co-signors with good credit as less of a risk and may offer more favourable terms. If you take this route, make sure you assess any potential risk and understand the implications of having a co-signor on your mortgage.

Multi-Unit Property

Purchasing a home that has an in-law suite or a second unit can increase your income on your mortgage application. Having a home that can generate extra income towards your mortgage payments could help you qualify for a bigger mortgage. Not only does it increase your monthly income, but typically properties with suites tend to appreciate faster in value as well.  Additionally, if you have a family, purchasing a home with a suite or second unit can provide a future home for your kids or family members, eliminating the uncertainty of them having to go into the rental market.


Everyone knows what a budget is, but with inflation increasing, implementing a plan could help save money and potentially prevent debt.  Putting on paper how much you spend monthly can help clarify how you spend your income. We see it daily at Auxilium: couples, individuals, and families generating a high monthly income but never saving money. Without a budget, weekend get-a-ways, daily shopping, and personal appointments can all add up more than you realize. A “homework assignment” we recommend to clients is to practice saving the monthly mortgage payment they would qualify for. Not only does it help clients see what they spend and how much they need to save, but also prepares them for the future and shows if they can afford it.

Saving a Bigger Down Payment

This is not what most people want to hear, and for most Canadians, it seems nearly impossible to do. If you can save or have the good fortune to receive a gift from a family member, then increasing your down payment to 20% will allow you to qualify for a larger mortgage. Not only will the amount of your mortgage be lower, but your monthly payments will drop as well due to the extended amortizations!

Since 2021, Canadians must undergo a mortgage stress test at either 5.25% or the contract rate your lender is offering plus 2%, whichever is higher. With how rapidly rates have been rising, many Canadians are having to pass a stress test over 7%! Talking to a professional about your current situation and what your goals are, is the first step to achieving it.

Ready to find out the right mortgage solution for you? Our team is here to help. Fill out our contact form or give us a call at 250-590-6520 (toll-free 1-855-590-6520) to see how we can find the best solution for your situation.

 Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.

This post reflects the best available information at the time of writing/last update. To ensure that you have the most up-to-date information, contact us to confirm the details for your specific situation.

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